In the new, non-normal environment, risk managers need to focus on existential threats that lie ahead
Risk professionals need to analyse how they and their boards can handle the enormity of the existential threats that lie ahead, Nik Gowing said.
In his keynote speech at the Airmic conference today, Gowing said: “The conformity which gets executives to the top and qualifies them for the top positions these days in many ways disqualifies them from accepting and embracing the enormity of the new non-normal change,” he explained.
He added that the UK election result underscored the new role that millennials and the next generation need to play in every single part of companies’ calculation. “The next generation feel left behind, irritated and angry that what they believe is simply not being handled and embraced in the way it should be.”
He said that companies need to have “a new awareness of what’s going on, a new flexibility, a new receptiveness to the enormity of what is changing, and a receptiveness to modify what to do and how to do it at the top”.
Gowing discussed Trump’s presidency, the recent IT outage at British Airways, and the United Airlines’ passenger forcibly being removed from an aircraft, as examples of how the new normal is no longer normal.
President Trump and the UK election result are symptoms of a much bigger issue, he said. “What we’re seeing in many parts of the world is the fact that those at the highest level believe they know best and they are not listening to, and don’t want to hear from, people who might have a different view. This is the heart of the problem: much of the risk which you might want to put on the agenda, those at the top don’t really want to know about.”
He added that in this new environment, “there are a lot of people of your level and further up who, by their own admission, are blindfolded and blind to what is going on”.
As another example of the changed world business operates in, Gowing mentioned the French elections. Winner Emmanuel Macron is running a party that is less than a year old. “This shows how the old way of thinking, the traditional assumptions of the way things are going to be, are no good anymore. You as a risk manager might have been talking to the traditional parties, but the traditional parties in a country like France don’t matter anymore. These are the new unthinkables. You therefore have to change the way you’re thinking about risk. It will no longer be reactive. Instead you have to work out what’s coming down the track and it’s coming down the track amazingly quickly.”
One of the things to take away from the presentation is that the new normal cannot easily be defined. “I can’t give you that definition, except the new normal is that it isn’t normal anymore. It is that uncertain in this new environment. The challenge for you is how you can create an awareness, a mindset which can handle this new ill-defined era for which there is no precedent.”